Australia’s China Shift Rattles Washington

Poonam Sharma
A subtle but unmistakable geostrategic realignment is in motion. As Anthony Albanese arrived at Shanghai airport on what was billed as a “reset visit,” it marked not only a warming of China-Australia relations—but a broader shift in Canberra’s global stance.

For many decades, Australia was the United States’ most trusted ally in the Asia-Pacific. However, the Albanese government seems to be pursuing a different path—one guided by trade realism rather than inherited Anglo-American emotion, and national interest rather than ideological allegiance. The Biden administration might discover that the Trump “America First” legacy has caused more damage than unity among its closest friends.

From Cold War Allies to Strategic Pawns?

Under Donald Trump, U.S. foreign policy was transformed dramatically. The “America First” ideology approached diplomacy as a transaction and boiled down historic alliances into leverage tools. South Korea and Japan—two countries under the U.S. security umbrella for decades—weren’t exceptions. Even Tokyo, which still carried the historic burden of Hiroshima and Nagasaki, was threatened with tariffs. South Korea, for all its devotion, got grouped with 13 others in a list of nations purportedly connected to “terror-adjacent” issues.
The message was clear: Economic alignment was a prerequisite of American friendship. Do not cooperate economically, and even friends would be dealt with like enemies.

Australia was no exception.

In 2021, under then-Prime Minister Scott Morrison, Canberra signed on to the AUKUS alliance—a historic trilateral agreement with the U.S. and the U.K., offering nuclear-powered submarines and closer security coordination in the Indo-Pacific. This agreement, though, at the expense of canceling a multibillion-dollar French contract sparked diplomatic outcry in Europe.

Washington’s subtext? If you grow too big, only American nuclear equipment can protect you.

Albanese’s Realignment: Outside the Anglo Bubble

But Morrison is away, and Albanese is not a Cold Warrior. His international policy has been less based on sentimental relationships and more on economic calculations. In 2024–25 alone, Australia sold more than $212 billion worth of exports to China. That’s more than twelve times the amount of exports to the United States. From iron ore to coal to tourists and students, Beijing is Canberra’s economic oxygen.
So when Prime Minister Albanese arrived in China, it wasn’t diplomatically symbolic—it was strategic signaling. Albanese tweeted images from Shanghai, thanking Chinese hosts, boosting Australian business, and quietly redefining what “alliance” means in a multipolar world.

Back in Australia, the decision was greeted with guarded optimism and a touch of relief. Australian youth, in particular, are increasingly skeptical about the post-colonial loyalty to English-speaking democracies. The old convention—that being a member of the Anglo club was about opting for Washington over Beijing—is rapidly disappearing.

Politically, Albanese might have merely rebranded “Australia First”—not in Trumpian rhetoric of fear and nationalism, but in an unapologetic assertion of sovereignty.

QUAD, Taiwan, and the American Dilemma

The United States has sought to redefine strategic groupings in terms of arrangements such as QUAD, which involves Australia, India, and Japan. But the fissures are beginning to show. India has made it wonderfully clear: QUAD is not a military alliance. Japan, tormented still by constitutional constraints and a pacifist citizenry, is diplomatically ambivalent. Australia, in the wake of Albanese’s China tour, seems less enthusiastic than ever to toe Washington’s militarization of the Indo-Pacific.
Washington’s strategic outpost, which accommodates the Pentagon, has allegedly demanded verbal assurances from its friends: “In the event of war over Taiwan, will you stand with us?” To date, few have responded. Japan is mum. South Korea, bruised from Trump-era abrasions, is hesitant. Australia appears to be sending a diplomatic but firm “not necessarily.

Politically, this is the consequence of years of American unilateralism. The very trust that facilitated NATO and post-WWII Asian alliances is now undermined by strategic ambiguity and economic coercion.

The Taiwan Flashpoint: Technology, Territory, and Tension

Taiwan’s role in this puzzle cannot be overstated. While most countries—including Australia—officially adhere to the One-China policy, the island remains a potential ignition point for global war. Its tech dominance through semiconductor giant TSMC makes it a crown jewel in global supply chains.
But backing Taiwan, from the U.S. perspective, isn’t just about democracy—it’s about tech supremacy. For China, it’s about sovereignty and historical restoration.

Australia’s past governments may have lined up unquestioningly with America on Taiwan. But this administration appears reluctant to be pulled into a high-stakes conflict with China—a nation it relies economically on, and where it has minimal direct strategic influence.

Such an economic realpolitik is why the Albanese government is so reluctant to fall into the trap of ideological conflict.

AUKUS Reconsidered: Buyer’s Remorse

There is no secret that even within Australia, the AUKUS agreement is facing renewed questioning. The submarine program has grown into a budget monster, with billions spent and delivery years off. With rumors that the U.S. can now “re-assess” its commitment, Australia stands to be left holding the tab—but not the shield.
Was AUKUS ever really about defense, or was it concerning the locking of Australia into a trans-Pacific security framework that serves Washington more than Canberra?

Strategically, Albanese’s recent reversal suggests that Australia will not be an appendage in America’s next conflict.

The End of Automatic Alignment?

The Albanese trip to China is more than a thaw in relations—it is a rebalancing of Australian foreign policy. If Morrison’s time was one of reactive security alignment, Albanese’s is one of proactive economic independence.
The deeper message to Washington is discomfiting: loyalty cannot be demanded, it must be earned.

During the Trump era, America attempted to trade loyalty on the basis of fear—whether by running trade wars, slapping terror labels, or threatening defense. But as the dust settles, the damage is irreversible. Former friends are hedging. Trust has unraveled. Strategic compliance is no longer a given.

For Australia, this might not be a break—but it is certainly a boundary.

And in an increasingly multipolar world marked by trade, technology, and tact—and not tanks—Canberra is subtly reminding Washington that alliances are no longer based on common history, but common advantage.